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Health Insurance Glossary

Definitions for common health insurance terms

premium subsidies

DEFINITION: Beginning in 2014, millions of Americans will discover that they qualify for Affordable Care Act premium subsidies designed to help them purchase their own health insurance. The subsidies will be in the form of tax credits. Low-income and moderate-income families earning up to 400 percent of the federal poverty level (FPL) will be eligible for subsidies. Households bringing in less than 250 percent of the FPL also will be eligible for help with out-of-pocket costs.

If your employer offers health benefits, you won’t be eligible for a tax credit unless your share of the premium for your employer’s coverage would exceed 9.5 percent of your income OR your employer offers a policy that pays for less than 60 percent of an average worker’s covered benefits. Find out whether you’ll be eligible for a premium subsidy.